You're watching...
Former CBO director Douglas Holtz-Eakin argues a Chinese slowdown will put the U.S. at risk for a recession.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
I don't know but there's big news out of China speaking of interest rate cuts and maybe this'll do it for a second time -- about they've cut rates China.
-- fight off a slowdown in an economy that well it could hit us depending on how things go in China.
It all comes on a day in which the White House -- lodged a formal complaint against China.
Over tariffs that they charge on US autos.
That are sent there so with all of that -- bring Douglas Holtz Aiken and president of the American action forum former the CBO.
Director so that's always good to see you.
The Chinese.
Let me show -- what they did they cut rates so and they've done it again as we said so even you say -- this is good they're gonna be able to avoid a hard landing in China had to take whatever steps are necessary or.
You sick boy this is bad because.
They're getting out ahead of some brutal GDP figures that are going to be coming out on their economy which is it.
Well I I think -- balances is bad news that we've seen China.
-- very resistant to -- worldwide slowdown for quite awhile but that you -- the past couple months they had to move third down another 31 basis points trying to prop up their growth rate.
And -- -- -- weakness in Europe.
India essentially stall then and not a lot of momentum in the US.
You've got a global picture that really does not suggest we're going to see -- like a sharp rebound outside China and that -- in -- continue to slow.
Big slowdown in China.
And then our economy follows even though maybe Europe gets their act together is that the picture you're -- you're painting -- the next few months just.
Yeah I I think there's real concern I mean we don't have a lot of domestic momentum we we've been having some jobs we haven't added any real income in the United States so there isn't.
The kind of household spending power that would -- -- recovery.
The European slowdown hurt our exports already in this have an impact on the US -- now China's slowdown would have comparable impact so.
This this is not a good outlook it's not one that -- that guarantees us a recession but we are growing so slowly that if anything goes wrong -- puts us at risk.
What should we deal really -- China that I -- on talk about politics now what should we do politically because we always talk about how China's the most important.
Bilateral relationship economically that we have I think most people agree that it is.
But should we talked tough on China's Mitt Romney has done in.
-- take the Donald Trump approach and that's funny the president today in the administration with this formal complaint that's been filed cynics will say that's just election year.
A politics should we talked tough for -- to pull back and try to.
Work with the Chinese as has been the policy for the last -- many years.
I think a little of both -- that China has a clear record of violation of international norms in the trade area in protection intellectual property.
I it has a very close capital market and if it wants to be a player on the world stage it needs to conform to its obligations and it has not done that it's appropriate to criticize them.
But I think the most effective strategies have to be multilateral they can't just be us vs China there's one child sees that kind of a set up.
Anything it does in the way of easing looks like a loss of face and -- it just won't do that so we needed different strategy.
One that gets effective.
I'm participation by the Chinese.
But one that doesn't rely on the US using carrots and sticks alone dog -- -- -- always good to see it thanks a lot thank you.
